PAUL BUDDE. The role of the NBN in the development of 5G

From a network efficiency point of view fibre-based infrastructure will always win over wireless. … Don’t expect a rapid development of 5G services for the mass market. 5G will most likely be installed in pockets where there is a clear business case (for a premium service) and where there is plenty of fibre available to provide a fast and reliable service.

With an NBN that is failing many customers it is no wonder that more and more people are looking towards mobile as a potential alternative.

Obviously mobile communication has improved over recent years in providing excellent access to broadband; and it has also become more affordable. At the same time there is the fabulous hype about 5G and the PR and media machines of the vendors involved makes you believe that this will become a real competitor to a faltering NBN.

First of all, anybody who has started to use video-based media over mobile networks seriously – beyond Facebook, YouTube etc – will have noticed that you will very quickly run out of the download capacity that is included in your mobile phone package, and any serious video use over mobile networks will quickly run into hundreds of dollars per month.

Secondly, 5G as a viable commercial mass market alternative might be 10 and possibly even 15 years away.

For starters, there is still not a 5G standard and this is essential for vendors to provide devices for mass markets in order to deliver an affordable device. Totally new handsets are needed to facilitate the multiple tiny antennas that are required in order for the device to operate over the high frequency necessary for 5G. No mass market will be achievable without a standard for such devices.

Secondly, 5G will require access to a fibre optic backbone in order to provide the affordable high-speed services that are talked about by the vendors and the mobile operators alike. Currently some 50% of mobile towers are linked to fibre optic networks – 5G could require a hundred-fold increase in mobile base stations and most of them need to be linked to a fibre optic network.

For the service to deliver the promised quality to the end-users a fibre optic connection to the 5G base station is needed within 100 metres of where the actual 5G users are. Furthermore, as soon as one starts talking about offices, public buildings, cafes, etc the reality is that the fibre network will need to be brought into these buildings in order to provide a reliable service. 5G has significant problems penetrating walls, foliage, water, even people (which from a spectrum perspective are seen as big bubbles of water). So in order to provide 5G services in these places multiple 5G antennas are needed within rooms to enable access to the mobile services.

When comparing wireless to fibre it is also important to note that, while wireless has a very limited capacity to carry lots of data over any distance (eg 100 metres for 5G), fibre can carry enormous amounts of data over tens of kilometres. So, from a network efficiency point of view fibre-based infrastructure will always win over wireless.

Don’t let any politically-motivated fake news get in the way of these facts.

As we have said in many of our articles over the last decade, mobile infrastructure and fibre infrastructure are both essential. It is not a case of either/or. But in the end mobile services will just provide local access linked to a fibre optic infrastructure. In other words, the majority of infrastructure needed to deliver 5G will be based on an FttH – or at least FttC (Fibre to the Curb) – infrastructure.

It is obvious that for these reasons it is impossible for the industry to deliver mass market 5G services within the short and even the medium term; so a 10-year horizon for such a level of 5G penetration is far more realistic.

Surely, in relation to mobile broadband being an alternative to the NBN – as is the case at the moment – mobile broadband will increase its position at the bottom end of the market, for those people with very basic broadband access requirements. At the most this might be sufficient for around 15% of the market.

However, at the same time the overall content requirements for ‘bandwidth-sucking’ applications will continue in areas like entertainment, as well as in education, healthcare, business, smart cities, smart grids, smart buildings and so on.

With the NBN company finally also looking at bringing fibre deeper into the network (FttC) this will potentially also benefit the development of 5G, depending on mobile operators being able to use the NBN network for that purpose. It would be rather silly if the 3 or 4 mobile operators were also forced to bring their fibres to the curb in parallel with the NBN in order to deliver 5G services. But, again, it will take a decade or more for the NBN company to upgrade the FttN infrastructure – which it is still currently rolling out – to an FttH/FttC network.

So don’t expect a rapid development of 5G services for the mass market. 5G will most likely be installed in pockets where there is a clear business case (for a premium service) and where there is plenty of fibre available to provide a fast and reliable service.

On the other hand, 5G could also be a potential saviour for the NBN company – that is, if it can get its act together to deliver FttH/FttC and to offer the use of the NBN to the mobile. But chances are that some of the mobile operators will not wait for that and will extend their own fibre backbones; if the latter is the case, the financial future of the NBN will be in even greater trouble than it already is today.

In the meantime, because of all the political infighting about the NBN, Australia will remain at the bottom of the international ladder for fixed broadband quality for many years to come (it is currently around 50th place).

Paul Budde is an independent telecommunications analyst. This article was first published on www.Budde.com.au

2 Responses to PAUL BUDDE. The role of the NBN in the development of 5G

I note your “dismal” conclusion – dismal that is from the consumers’ perspective: “…Australia will remain at the bottom of the international ladder for fixed broadband quality for many years to come…”.

I apologize in advance Paul, but I have to ask: how the hell did we end up here? In casting around for sensible explanations, I came across a reference to what Mungo MacCallum calls: “…the Australian genius for rorting.” [1]

For want of any other persuasive explanation I concluded there exists also an Australian genius for buggering-up things – for getting the worst possible result for the amount of money spent. I may well be mistaken, but it seems to me this is 99% thanks to meddling politicians whom I believe have a collective genius for turning opportunities into disasters, and wasting huge sums of public money in the process – whilst at the same time taking every opportunity to safeguard and increase their pensions and entitlements. Too cynical a view perhaps?

Apologies Paul for that digression. I would like to refer you to an article by Alan Kohler in the Weekend Australian, April 22-23 (at page 25) where he refers to the advent of Amazon into the Australian retail sphere and what that represents for all Australian businesses. He refers (with approval – I think) to what he calls Amazon’s “customer focus”, and how this concept may well decide how many Australian companies and businesses succeed or fail in the future.

It is in this context of serving customer needs that Alan mentions Mukesh Ambani the CEO of Reliant Industries, who “…is turning the world of mobile telephony upside down, not just India.” Alan notes that last year [Reliant] “…launched the world’s first data-only, fully IP mobile network, called Jio. It has since picked up about 100 million customers. Voice calls, carried as data, are entirely free.” Alan goes on to mention that data is the equivalent of $1 per gigabyte, “…one tenth of the existing price and, as it happens, one tenth of the average price in Australia.”

Given your reference Paul to : “…the fabulous hype about 5G and the PR and media machines of the vendors…”. it was interesting for me to recall from Alan Kohler’s article that: “Most mobile networks were built for voice and are being “retrofitted” for data. The Jio network bas been built specifically for data, and works entirely with internet protocols – leapfrogging 5G, which Telstra is planning to bring in…some time. Reliance seems to be passing on almost all of the cost savings from this network structure, with the intention of making money from content – movies and games, etc.”

Earlier Alan Kohler had noted that: “If David Teo of TPG follows [Reliant’s] lead, the disruption to Australian telecommunications will be spectular and bloody.”

I do have a vague memory of some occasion or other when our learned Prime Minister endeavoured to explain to all Australians the benefits – perhaps even the necessity of being focussed, innovative, competitive (and of course self-reliant).

Maybe someone in Australia could adopt our PM’s advice and give Reliant a call ’cause there ain’t much happening here.